Chapter 8 - Your Mission and Chapter 9 - Managing Your Money

CHAPTER 8

Your Mission

The next part of fine tuning the structure and management of your professional service business is to define what it is that you are actually trying to achieve and most importantly who you want to work with. There are so many professional service firms out there that you need to stand out, you don't want to be just like every other offering out there, if you do that you will never stand out in the crowd. 

I see it all of the time, professional service firms attempt to distinguish their business online by saying something like:

"to deliver outstanding client service; 

to provide fulfilling careers and professional satisfaction for our people; and 

to achieve financial success so that we can reward ourselves and grow."

One problem here is that this doesn't distinguish you and your business in the eyes of your client. They just role their eyes and say, well they are just like everyone else. What you need to find is something that actually differentiates you from your competitors. 

Another problem with these statements is that they really are a given, they are what your clients assume will be a starting point for dealing with you, not something unique. They assume that you will deliver outstanding client service, they assume (if they care) that your team will be satisfied and they assume you are making money (otherwise why would you be in business).

More importantly, they are focused on you, all too often the focus of these statements is on you and your business. Unfortunately your clients don't care about you, they care about themselves. Its just human nature they care about themselves and 'whats in it for them'. You need to remember this in all of your client interactions. Whilst your mission can be focused on you that is an internal statement what you need to consider is your clients. I will go through crafting this message for your clients in more detail in chapter 16.

The internet is such a great tool for doing this market research, jump online and google your competitors (both local and in other markets) and see what they are all saying. Write these down and as we go through the different elements of your mission you can start to differentiate your service from theirs so that your clients truly understand why they should hire you. 

The best way to grow a professional service firm from 6 to 7 figures is to focus on finding solutions for your clients and then collaborate with other professionals to deliver those solutions. More on that in chapter 15.

Building the Internal Mission Statement

It is important to get the internal mission statement right first before you do the client mission. The three areas to focus on are 

Service 

Why do people hire a professional to do work for them? It is usually because they have a problem, they need to solve that problem and they don't know how to solve the problem. To consider why people hire a professional lets look at the different types of work that professionals perform. The type of work is defined into three broad categories:

? Creative (Brain) work - this is work that is creative, unique and usually innovative in some way. Here the professional is using their creativity to come up with a solution for their client that they may have not done before. They are usually time bound by client expectation along with the professionals availability (e.g. in both the legal and accounting context - advice in relation to a new business).

? Experience (Greyhair) - these are engagements that are generally defined by the fact that there is a process that you can follow and you have experience doing that work. They are usually time bound by legislation, rules or contract (e.g. in the legal context - litigation, in the accounting context - tax planning).

? Projects (Sausage factory) - these are projects, where professionals are engaged because the professional knows how to do the job and can deliver it effectively. They are always time bound by either a contract or legislation of some kind (e.g. in the legal context - conveyancing, in the accounting context - individual tax returns).

In any 6 figure professional service business it is common for you to do all three types of work at different times during the week (and more likely during the day). To be able to successfully transition your business from 6 to 7 figures you need to focus on one of these areas. There is no right or wrong answer here, if you have decided to step away from doing the "professional work" that may be because you don't want to be doing work that is time bound by legislation or a contract. If you decide to continue doing that work it may be that you employ a manager to operate the business. Both methods are correct depending on what it is that you want to achieve. I recommend that you consider which of these categories you want to focus building on for your mission statement.

Team 

People join professional firms not for jobs but for careers. They invest a significant amount of time in their education so that they can learn the basics of their profession. This is usually their identity and in any business you need to consider what it is that they want so that you can build your business from 6 to 7 figures. In the diagram above I have placed team members at the bottom of the ven-diagram to show that they support the other two areas, clients and profitability. 

For a professional services firm to grow from 6 to 7 figures you need to consider the types of people that you need for the business. Above I talked about the roles that you need and how to define them. Here I am talking about the actual people, different people have different ambitions, skills and dreams for the future. Importantly those preferences evolve over time, and you need to talk to your team regularly (I recommend fortnightly catchups with them in this regard (for those in the US a fortnight is not the misspelling of a video game but a 2 week period)). The three broad categories are:

? The finders - these are the people who go out and find the work. They can be called rain makers (although that is often misleading as they don't actually do the work). 

? The minders - these are the people who are great at maintaining client relationships and keeping them happy. They love customer service and dealing with people.

? The grinders - these are the people that do the work. They are important because without them the work can't be performed and the business would fail.

Most professionals have no idea that there is anything else then being a grinder, they get in and do the work, they are very good at it and they are rewarded for the work that they do. Worse the owner of a professional service business (especially one in the 6 figure bracket) usually believe that they can do all 3 all of the time. That works for some time but in the end it leads to exhaustion and burn out. There are different profiling tools to help you discover where peoples strengths are and help define them. One that we use is the wealth dynamics profile. It is outside the scope of this book to discuss these tools however you can find out more on the accompanying webpage to this book jeremystreten.com/grow.

So what does all of this have to do with the mission statement. It is important to understand, when crafting your mission statement for a 7 figure business that you need to attract all three areas to build a great business. You need to have the people finding the work, maintaining client relationships and of course doing the work. Don't try and do it all yourself, it will never help. Your mission as it relates to team needs to be a balanced approach that provides professional fulfilment and a progression for the future.

Profitability

The purpose of being in business is to solve peoples problems and make money at the same time. Your clients don't care about your profitability, no doubt at 1 level they want you to be able to provide for your family, at the end of the day so long as you are in business they will assume that you are making money. The same can be said of your team, there are some exemptions but they usually don't care about how much money you make. To be fair they should care as it is in their (and for any team member reading this you absolutely should care) interests so that you have a successful business.

Profitability leads to success so when you are making money you need to find ways to share that success with your team. Again here your clients don’t care about the profitability. However internally your mission statement should include a statement about profitability and growth. If you are afraid to talk about it then your team will definitely be afraid.

Leveraging your time

As a professional who has built a 6 figure business you are no doubt awesome at the professional work. Many of us feel that we need to grow our business into a bigger business and that is not always the best thing for you. However, if that is what you want then you must embrace leveraging your time. There is no way that you can build a sustainable 7 figure practice until you do, and if you try unfortunately it won't work for very long.

This is where you need to think about who the best person is to perform the work that you need done in your business. I discussed this in chapter 7 when I went through the different roles in a business. Here you really need to work out what is the highest and best use of your time. What high value activities should you be doing and who can you get to do the other work that is not the best use of your time. 

There are different factors that go into this decision including the work that you want to perform and what makes you happy. The first step however is to work out what it is that you do on a regular basis. I first read about this in The Effective Executive , a book by Peter Drucker (one of the key leaders in management thinking in the 20th century). The process is to do an audit of your time, where you spend it, what you spend it on and work out what you want to do. 

The most effective way of doing this is over a period of 2 weeks (that’s 10 working days) of keeping a record of everything you do. Once you have that information, you need to review what you do, what you enjoyed doing and work out where you want to spend your time. Then you need to delegate the rest. I have put together a short course on this process, together with all the templates that you need to do to follow the process. Visit jeremystreten.com/time-audit and jeremystreten.com/grow for the process.

Once you know what it is that you want to do you hire people to delegate the rest of the work that you don't enjoy. That may sound simple, it is a challenge for a lot of professionals as often that work is work that they are good at and generates income. Unless you hire someone to manage your business you need to let go of some of that work. One of the reasons that we follow this process is that it helps to show what the future will look like if you do it right. 

Conclusion

When you grow your business in this way you will leverage your time and your business and that makes more revenue for the business. Developing a mission statement will take some time. Doing that work will help you figure out why you are in business and who you help. Importantly this is a process that is not set in stone, it will change and adapt based on your needs and wants. You should revisit this at least every 3 years or when something changes in your life. The next step is to consider how you manage that money. As the saying goes revenue is vanity, profit is sanity, cash is king.

QUESTIONS AND TASKS

Before you move on to the next chapter I encourage you to really think through these questions:

1. What is your mission statement?

2. Complete the time audit?

3. Critical Thinking Question - What tasks should I delegate? You need to do task 2 here to work out what you shouldn't be doing and what you need a team to help you with.

Visit jeremystreten.com/grow for more on this topic.

CHAPTER 9

Managing Your Money

Often when professionals grow their business from 6 to 7 figures I hear them say "I wish I had a small business", "I made more profit when I was smaller". Managing the revenue generated by your business is such an important process because the quickest way for you to lose interest is to not make any money. The principles that I am talking about here are not new, but they are the subject of a truly excellent book Profit First, Transform Your Business from a Cash-Eating Monster to a Money-Making Machine by Mike Michalowicz. 

I will talk about the principles in a broad way as part of this book however I strongly recommend that you buy this book. If you like audio books Mike Michalowicz is the master of the audio book. They also have a network of profit first professionals who can help you implement the system in your business. For a long time I didn't read this book and thought I was implementing the process. It wasn't until I did read the book that I saw the true power of this process and it's benefit for me and my business.

The basic concept of Profit First is to divide your revenue in buckets which ensure that the business owner pays themselves a profit distribution for their business. This is extremely important as you increase your revenue from 6 to 7 figures and especially so if you step away from doing the professional work in your business. The positive impact that this concept caused to my business was remarkable.

The first stage of the profit first system is to divide your revenue into 5 buckets, income, profit, owners compensation, tax and operating expenses. All of your revenue goes into your income bucket, you then divide that based on pre-defined percentages so that you receive the appropriate income from the business. The book goes through how to do that, it depends on the revenue that you generate. It also goes through a process of how to over time change those percentages to where they should be for your business. Profit is put aside to pay the owners of the business a percentage of revenue as profit as compensation for working on the business. Owners compensation is put aside to pay the owner of the business for working in the business. Tax is put aside to pay all of your tax expenses so that you never fall short on this again. Operating Expenses are put aside to pay all of your bills.

What this gives you is a first level dashboard that you can see every time you open your online banking system to see what money is in the business. I am not going to sugar coat this, the system will expose flaws in your business and probably in your business model. It will show you where the money is going in your business. If you follow the process as advised by Mike Michalowicz you will find that you have more cash in your business and you will confront the challenges of growing your business better.

When building a business from 6 to 7 figures you need to implement the first step detailed above. If your business spends a lot of outlays then you need to consider those as costs of goods sold in the profit first process (you will know what I am talking about here when you read the book). You may also find the need to divide your operating expenses into different categories, such as wages (the biggest expense in a professionals service business that is or has grown from 6 to 7 figures), marketing and rent (if you rent premises). Again this helps you see where the real problems are in your business and helps give you a method to solve those problems. 

What this system also shows is the profit that you make from the business. All too often the owners of professional services business don't pay themselves a profit. The profit system forces you to pay yourself a profit, which the owner can pay themselves. As you step out of doing the work in your business you will see the benefit here as you are paid a percentage of the work that you do. 

Conclusion

Growing your business from 6 to 7 figures often means more stress and heartache for the owner of the business. By putting this system in place helps you to pay yourself a profit and ensure that your expenses aren't getting out of control. It may seem odd for an author to direct you to read another book. I can tell you from experience I didn't do that, I tried to implement the system without reading the book and I wish I had read it earlier. The concepts are so perfectly explained in that book that there is no point in me trying to copy it.

QUESTIONS AND TASKS

Before you move on to the next chapter I encourage you to really think through these questions:

1. Read Profit First

2. Implement the system into your business.

3. Critical Thinking Question - What expenses are unnecessary for my business? Where does profit first show I am spending too much money.

Visit jeremystreten.com/grow for more on this topic.